Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

To make Britain competitive globally, we must strip away regulatory red tape

To make Britain competitive globally, we must strip away regulatory red tape

Last month, the UK’s Competition and Markets Authority (CMA) made a ruling which blocked the merger of the two British crowdfunding sites Seedrs and Crowdcube. This was wrong for a slew of reasons, not the least because Seedrs and Crowdcube are both tiny companies that should be below the regulatory radar.

Both companies are currently loss-making and may need the scale that a merger would bring to remain viable. More than competing with each other, they compete in a huge and highly competitive market for start-up funding that includes seed funds, bank finance, angel syndicates and corporate venture funds. But mostly it was wrong because they, like the majority of digital businesses, compete in an increasingly global market.

Look at PayPal from the US, Sweden’s Klarna, or the UK’s TransferWise. In each case they started by serving their domestic market and then expanded to compete internationally. This is often the way with digital offerings.

The UK has a strong position in building innovative digital businesses, and is particularly strong in financial technology (fintech). For Britain to maintain this position, which is more important than ever as we seek to mitigate the impact of Brexit, we need a business and regulatory environment that supports the growth of our technology innovators.

At the forefront of this needs to be reining in excessive regulatory interventions in a range of areas. The recent review of UK competition policy by Conservative MP John Penrose lays the foundation for this. The report recognised the cumbersome red tape which slows businesses down and increases transaction costs and suggests a “better regulation” regime”. It proposes a “one-in-two-out” strategy for ministers attempting to introduce new rules. This must also translate into a clearer set of rules from sector regulators, so innovators can operate without risk of retrospective rule making and enforcement actions in the future.

In order to foster competitiveness after Brexit, predictability will be key. This will require the CMA to have a transparent and speedy process, with decisions made in weeks rather than months or years. Predictability means rulings based on the risk of consumer detriment from the combination of the companies’ current operations, not some conjecture about what they might do in the future.

The CMA review of Amazon’s proposed 16% stake in Deliveroo in 2019 hinged on whether Amazon might, in the future, enter the UK takeaway delivery market. Such decisions cast the CMA as soothsayers. Many big tech companies could, conceivably, enter many, many markets. To know that almost any such transaction could be thwarted based on regulator crystal ball gazing makes any UK-based merger highly uncertain and therefore less attractive.

Britain’s mergers and acquisitions review process must also recognise the international nature of competition in digital markets. With its focus on domestic competition, the CMA is far more likely to block the combination of two UK businesses than the sale of a UK business to an acquirer from overseas. Of course we need to protect consumers from the creation of true monopolies, but we must also recognise that competition is increasingly global, and have an eye to UK competitiveness. If it is far easier for our tech companies to sell to overseas buyers than to merge domestically, then our best digital IP will end up in foreign ownership and we will fail to create UK-based scale players that can compete on a global level. Our economy will be all the poorer as a result.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Man Convicted of Fraud After Booking Over 120 Free Flights Posing as Flight Attendant
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Hungarian Parliament Approves Citizenship Suspension Law
Prime Minister Orbán Criticizes EU's Ukraine Accession Plans
Hungarian Delicacies Introduced to Japanese Market
Hungary's Industrial Output Rises Amid Battery Sector Slump
President Sulyok Celebrates 15 Years of Hungarian Unity Efforts
Hungary's Szeleczki Shines at World Judo Championships
×